Under the terms of the deal, owners will receive between $5,100 and $8,000 Canadian ($3,800 to $6,000 USD) in compensation and will have the option to sell their cars back, have VW repair them, or trade them in for new gasoline-engined VW vehicles. The formal agreement is expected to be ratified on March 31, 2017, which will kick off the buyback and compensation process.

The gasoline-engined VW trade-in option is one of the main differences between the U.S. agreement with TDI owners and the Canadian deal. The entirety of the $2.1 billion expenditure is believed to be committed to the buyback and compensation process, as opposed to the U.S. deal, which includes environmental promotion provisions.

The tentative deal is the first real sign of progress on the matter in Canada. Owners of 2.0-liter TDI vehicles have been in limbo since September 2015, unable to freely sell their cars on the secondary market due to uncertainty over their future legal status.

Word of a deal for Canadian owners comes ahead of a delayed agreement regarding the 3.0-liter TDI issue in the U.S., with VW Automotive Group attorneys conducting last-minute negotiations with U.S. agencies. Resolution of the 3.0-liter TDI issue has been delayed several times following rejected technical solutions for some 85,000 VW, Audi and Porsche vehicles in the U.S. The upcoming agreement, expected to be formally submitted to a U.S. District Court, is believed to include buyback provisions for older Audi Q7 and VW Touareg models equipped with the 3.0-liter V6 TDI engine, in addition to compensation for all affected owners.